Politcians Opposing Free Trade: It’s All About Politics, NOT Economics, Benefits and Jobs

“It’s been two years in a row now that President Barack Obama has mentioned the pending U.S.-Panama and U.S.-Colombia free trade agreements in his annual State of the Union address. Will 2011 be the year that they are finally presented to Congress and approved?

Economic logic would certainly support it. But as we all know, when it comes to matters of policy — especially trade policy – political logic (or illogic) often enters, twisting the facts and the debate. But the facts in this case are pretty straightforward: In markets opened up by previous free trade agreements (FTAs), the overwhelming majority of states have seen the exports grow – in some cases exponentially.

Based on research conducted by the Americas Society, even the states whose representatives have voted against nine of the recent trade pacts that have come before Congress have – by a large margin – seen their exports increase.

Just look at some of the examples of the FTAs signed with partners south of our border.

While a majority of Alabama’s congressional representatives voted against the North American Free Trade (NAFTA) agreement in 1993, the state’s exports to NAFTA markets have grown by more than 250 percent since then. Nevada and West Virginia’s representatives all voted against the expanded North American market and yet saw their exports boom, by 535 percent and 294 percent respectively.

To take the case of the our FTA with Chile, Alaska, despite its solid opposition to the agreement in 2003, has enjoyed a near 700 percent increase in its exports to the South American country, and Vermont, which also opposed it, has seen its exports shoot up by more than 1,000 percent. This is more than Ben and Jerry’s ice cream and maple syrup. These are high-end goods and jobs.”

MP: In other words, when it comes to opposing free trade, it’s all about politics, and not about proven and certain economic benefits (more jobs) of free trade agreements. Due to political blindness and pandering to well-organized special-interest groups, politicians apparently don’t even know what’s good for them and their states.

Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan.

He holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University in Washington, D.C. and an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota.

Since 1997, Professor Perry has been a member of the Board of Scholars for the Mackinac Center for Public Policy, a nonpartisan research and public policy institute in Michigan.